Irresponsible lending?

Doobedoobedoo

My adult son is struggling with his mental health and addiction. He lost his minimum pay job 4 months ago and haven't worked since, although he is trying hard to get another job. He gets £70 a week universal credit. He gets food and home with me. I refuse to give him money. I don't really have any to give but I will not fund his addiction. 

I found out that his bank has steadily increased his overdraft to £3000! As if that isn't enough, another bank has given him an account with an overdraft!
How can banks do this? Surely this is irresponsible lending? I am not trying to absolve my son of responsibility, definitely not but I thought after the banking crash that banks were supposed to be a bit more discerning in who they loan money to?

Spies

How are they supposed to know their customer has an issue unless you approach them? 

Grumpy_chap

Doobedoobedoo said:

My adult son is struggling with his mental health and addiction. He lost his minimum pay job 4 months ago and haven't worked since, although he is trying hard to get another job. He gets £70 a week universal credit. He gets food and home with me. I refuse to give him money. I don't really have any to give but I will not fund his addiction. 

I found out that his bank has steadily increased his overdraft to £3000! As if that isn't enough, another bank has given him an account with an overdraft!
How can banks do this? Surely this is irresponsible lending? I am not trying to absolve my son of responsibility, definitely not but I thought after the banking crash that banks were supposed to be a bit more discerning in who they loan money to?

Do you know what information the banks have that they based their lending decisions against?

prettyandfluffy

Spies said:

How are they supposed to know their customer has an issue unless you approach them? 

I would have thought his income dropping to £70 per week UC might have raised some questions,

Doobedoobedoo

Spies said:

How are they supposed to know their customer has an issue unless you approach them? 

There was no money went into his bank from mid November until Mid February when he got £280 from Department of Work and Pensions. I think that would indicate there was a cash flow problem. 🤔 

Spies

prettyandfluffy said:

Spies said:

How are they supposed to know their customer has an issue unless you approach them? 

I would have thought his income dropping to £70 per week UC might have raised some questions,

They don't monitor accounts closely, how would they know what he might be receiving in another bank account?

Doobedoobedoo

Spies said:

prettyandfluffy said:

Spies said:

How are they supposed to know their customer has an issue unless you approach them? 

I would have thought his income dropping to £70 per week UC might have raised some questions,

They don't monitor accounts closely, how would they know what he might be receiving in another bank account?

That's kind of my point. Surely NOT monitoring the accounts they are offering the loan on, is irresponsible? 

Doobedoobedoo

@Grumpy_chap no, I don't know. All I know is that the overdraft was increased in increments of 2-3 hundred at a time, from £300 to £3000. 

Doobedoobedoo

My query isn't just about my son. This will go one of two ways for him. He will get a job and slowly pay it back, probably agreeing a payment plan via CAB or similar...or he won't! He will not get another job, he will not get out of the fix he is in at present and the banks will not get their money because he will have none to give. 
Is that what we consider responsible lending? 

Spies

All the institution can do is come back with a reasonable payment plan, if you're unhappy with the decision you can complain to the financial ombudsman. 

elsien

With regards to the second account and overdraft, it is possible that your son was not entirely accurate in the application with regards to his earnings. I don’t remember anyone checking that the last time I opened an account.